Thoughts From the Frontline, September 2004

How might the economic world be turned upside down as we go from a post-industrial society to a world driven by intellectual property? What if manufacturing no longer was the driver for economic well-being because that is not where the profit is? What if the trade deficit was not as large as the numbers suggest? This week we examine a lot of interesting what ifs while we look for the connections between the steam engine and Napster. All these questions and more should provide us with a little...

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A battle plan, we are told, seldom survives contact with the enemy. Nonetheless, military leaders throughout the world wisely persist in making plans they know will be changed time and time again once the battle starts. Contingency plans are made for all sorts of events, whether likely or unlikely, on the off chance that when something goes wrong (and Murphy assures us it will) that there will be a plan to deal with the next crisis, even if it is to declare victory and go home. Armies train to...

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Today we look at the connections between French farming, China, poor economic forecasting, page 16, single derivative thinking and our investments. We wander and wonder far afield in order to get some insight into our own backyard.

Let's start in the south of France. I was visiting Bill Bonner, of Daily Reckoning fame, last weekend, deep in the heart of Southern French farming country. Riding on the train to his home in Ouzilly with Tiffani (my daughter and assistant), you could see the...

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When can we once again return to the stock market with some long term confidence? What's up with bonds and global reflation? This week we continue to meditate on the risks of lazy investing and single derivative thinking, ranging far and wide in an effort to understand the world in which we find ourselves.

While you are reading this letter on Saturday, in theory I will be setting up the grill for a little weekend Texas-style barbecue with good friend Bill Bonner in his chateau (that is the...